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Contents

I. Introduction and Background ..................................................................................................... 1

The Senior Officials Meeting...................................................................................................... 3

II. Progress on Realizing Self-Reliance: ......................................................................................... 6

A. Improving Security and Political Stability ....................................................................... 6

B. Tackling the Underlying Drivers of Corruption ............................................................... 8

C. Building Good Governance ............................................................................................ 10

D. Restoring Fiscal Sustainability ....................................................................................... 11

E. Reforming Development Planning and Management .................................................... 13

F. Bolstering Private Sector Confidence, Promoting Growth, and Creating Jobs ................. 14

G. Ensuring Citizens’ Development Rights ........................................................................ 16

H. Regional Economic Cooperation ................................................................................... 17

I. Reforming Development Partnerships ............................................................................... 18

Conclusion .................................................................................................................................... 19

Annex I: Status of 25 short-term priorities from Self-Reliance Paper. ..................................... 22

Annex II: Status of Progress on Annex I Hard-deliverables under the Tokyo Mutual

Accountability Framework. ...................................................................................................... 36

Annex III: National Procurement Commission Reviews (as of August 17, 2015) ................... 47

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Abbreviations ACCI Afghanistan Chamber of Commerce and Industries

AGO Attorney General’s Office

AHIRC Afghanistan Independent Human Rights Commission

AISA Afghanistan Investment Support Agency

ANSF Afghanistan National Security Forces

ASYCUDA Automated System for Customs Data

BRT Business Receipt Tax

CAREC Central Asia Regional Economic Cooperation

CBR Capacity Building for Results

CEO Chief Executive Officer DAB Da Afghanistan Bank (the Central Bank of Afghanistan)

DBI Doing Business Indicators

EITI Extractive Industries Transparency Initiative

EVAW Elimination of Violence against Women

GDP Gross Domestic Product

HOO High Office of Oversight

ICC International Coordination Committee for National Human Rights Institutions

LOTFA Law and Order Trust Fund for Afghanistan

MEC Monitoring and Evaluation Committee

MOU Memorandum of Understanding

NPC National Procurement Commission

NPPs National Priority Programs

PFM Public Financial Management

PFM Public Financial Management

RECCA Regional Economic Cooperation Conference on Afghanistan

SAARC South Asian Association for Regional Cooperation

SMAF Self-Reliance through Mutual Accountability Framework

SMP Staff Monitored Program

SOM Senior Officials Meeting

TAPI Turkmenistan, Afghanistan, Pakistan and India

TMAF Tokyo Mutual Accountability Framework

UNAMA United Nations Assistance Mission for Afghanistan

UNSCR United Nations Security Council Resolution

VAT Value Added Tax

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I. Introduction and Background

Afghanistan’s National Unity Government took office in October 2014. On December 4, 2014,

the new government used the London Conference on Afghanistan to present an ambitious reform

program to the international community. The “Realizing Self-Reliance” reform strategy promised

to put in place the building blocks needed to promote security and support regional diplomacy;

begin the process to make Afghanistan’s public finances sustainable; improve governance; trig-

ger growth and job creation; and ensure that the basic rights of the Afghan citizenry to participate

in and benefit from development are realized.

For the Government, realizing self-reliance is much more than a strategy. It is a fundamental

shift in the way we approach the challenges that lie ahead to peace and prosperity. The pressing

need for reforms has been building on several years of dialogue with the international communi-

ty that resulted in the Tokyo Mutual Accountability Framework (TMAF). Momentum for reform

has also come from the lively democratic discussion within Afghanistan over the people’s aspira-

tions and priorities for reform, which had culminated in the election of the National Unity Gov-

ernment (NUG). In London, donors confirmed their support for the “Realizing Self Reliance” strategy, agreeing to review progress on both Realizing Self-Reliance and TMAF in September

2015 and coming up with a refreshed TMAF, which is now called the Self-Reliance through Mu-

tual Accountability Framework (SMAF).

The new government took office at a challenging time in 2014. The period between 2002 and

2012 saw much progress in rebuilding the basic organs of the state and restoring the most basic

of services, particularly in the first half of the decade when the conflict was less prevalent. Part-

nerships between the government and the international community began a steady process of im-

proving the health, education, and economic prospects of individual Afghans. Table 1 pro-

vides a snapshot of that decade of progress.

By late 2012, the signs that progress had slowed and reforms had plateaued were already visible.

Coalition forces had begun their withdrawal and by 2013 the drawdown of international troops

was well advanced. By the London Conference, virtually all combat operations by the interna-

tional forces had ceased. As was widely anticipated, the economy suffered a shock as interna-

tional spending on Afghanistan was sharply reduced. Soon afterwards the Taliban launched their

most aggressive assault in nearly fourteen years, putting additional pressure on the national

budget through increased security costs.

Afghanistan’s development context is every bit as challenging as the security environment. Rela-

tionships with the international community became difficult in the year before the 2014 election.

With escalating conflicts destabilizing the region and over 85 percent of government expenditure

in Afghanistan derived from international assistance, both donors and the government are to

some extent locked into a partnership they cannot avoid. The conditions are not conducive to the

kind of private sector investment that could drive a diversified and sustainable economy, and not

expected to change for some years to come. Instead, employment is driven by security spending,

aid projects, a large but not very productive informal sector, and a battery of illicit activities that

include growing opium, cross-border smuggling, and small scale illegal mining.

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The Afghan economy is shaped by the on-going conflict. Returning refugees and internally dis-

placed people have flocked to the cities, leaving agriculture behind. This unplanned and disor-

derly rural to urban migration has meant most people are not primarily moving to find employ-

ment or to create livelihoods, but are simply fleeing conflict and poverty. With little or no formal

employment, urban poverty is a growing problem, often leading to crime.

The difficult overall development environment in Afghanistan is matched by an equally prob-

lematic public administration. Corruption has been rampant across government. The Kabul Bank

scandal was serious enough in its own right —the total losses amounted to nearly 50% of the en-

tire country’s national spending on education —but it also epitomized the extent to which key

sectors such as finance, mining, and transport could be plundered. Remaking the public service

into trusted institutions is a key challenge in building the legitimacy of the state in a country with

little history of good government.

Deeply embedded patronage across government institutions has meant merit or competence

based selection of civil servants is not the norm, which translates into very low capacity in many

core areas of government policy making and service delivery. This was one of the reasons why

donors were reluctant to use government systems and instead have kept much of their aid off-

budget. Even following more recent agreements to put more aid on-budget, much of the increas-

es have been in non-discretionary, project based aid. While this meets commitments made by

donors, it in effect provides no added flexibility in the budget for the government and holds the

government responsible for funds that government policy makers have little or no control over.

Planning remains fragmented and unrealistic; capital investment is favored over operations and

maintenance; and strategies to develop healthy government management systems are undermined

from the outset.

This prevailing context for the civil service has seen qualified civil servants and educated Afghan

specialists increasingly leave the government for better pay and working conditions with interna-

tional agencies and contractors. Development agencies and their Afghan partners have in part

tried to overcome the low capacity and poor performance of the civil service by using contracted

staff embedded within ministries to execute urgently needed programs, creating what the Presi-

dent has called a “second civil service”. As aid levels have begun to drop and capacity building

projects come to an end, it is becoming clear that the substitution of government capacity inher-

ent in this approach is unsustainable. Ministries need to be weaned off technical assistance and

the current culture within the civil service transformed into one based on performance, accounta-

bility and service.

The result is that, despite all of the progress of the previous decade, Afghanistan is still at the

bottommost register of nearly every international indicator of effective development. Moreover,

in some areas past positive trends have slowed down significantly or even reversed. Table 1

provides a snapshot of Afghanistan’s position in a number of widely used development ranking

indices.

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Table 1: Afghanistan in Global Perspective

The current government took office with Afghanistan having some of the world’s worst indica-

tors on rural poverty, maternal mortality, domestic violence, and infant stunting. Trust in the

government was low. The fiscal position was highly constrained with public finances heavily

stretched as security costs remain high and investment remains low. Criminality was rampant

and has in the past penetrated deep into the government itself, with pervasive corruption being

the most visible but not the only symptom. Core institutions such as the justice sector have his-

torically performed poorly. Constant uncertainty about the future—political, economic, and secu-

rity—continues to undermine confidence and severely constrain private investment, leading to

increasing flight from the country of both capital and people.

The Senior Officials Meeting

The Government took office promising a comprehensive program for reform. This Senior Offi-

cials Meeting marks the tenth month of government action on the “Realizing Self-Reliance” agenda presented at the London Conference. A lot has happened since the London meeting. The

objective of this report is to provide a candid assessment of how much progress has been made

on the reform agenda and the TMAF commitments.

Reform is underway: After a challenging first few months in office, the government has put in

place the building blocks needed to implement the “Realizing Self-Reliance” agenda. The Na-

tional Unity Government is already a much more effective instrument for policy leadership and it

is launching a revitalized electoral reform process to give momentum to these first steps towards

better government. The politics of the Unity Government required compromise and negotiations

to ensure a stable and legitimate outcome. The results have been positive despite the initial de-

lays. The Cabinet is now in place and includes a large share of highly qualified ministers with

clear mandates to drive reform. The revised Cabinet and Council of Ministers processes are

bringing clarity, transparency and accountability to decision making. Whilst there have been

some unavoidable compromises with political stakeholders, the new governors, who will be the

1 1=best, 7=worst. Freedom House

1

Index Afghanistan G7+ Average

Transparency International 172 145

Ease of Doing Business 183 133

Human Development Index 169 157

World Bank CPIA 2.7 3

Freedom House Index1 6 3.5

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face of the government in the provinces, were similarly chosen primarily on merit and are al-

ready helping to improve sub-national governance. A draft national policy on subnational gov-

ernment has been developed through consultation with provincial stakeholders.

Afghanistan’s relationships with its neighbors have improved significantly. The commitments by

the President and the CEO to security and economic cooperation are slowly bearing fruit. Trade

agreements are being negotiated. Plans for cross-border investments are being developed. Af-

ghanistan is playing a central role in promoting dialogue on peace and security at home and in

the region, and discussions are beginning on opportunities for better economic integration in

South, West, and Central Asian regional forums such as the Heart of Asia-Istanbul Process,

SAARC, and the Lapis Lazuli trade corridor dialogue.

The economy remains fragile but there are signs of a modest recovery following the election.

The uncertainty created by the political and security transitions in 2014 coincided with a slow-

down in growth and business activity. Real GDP growth fell from 6.4 percent in 2013 to 2.1 per-

cent in 2014, but is expected to recover to 1.9 percent in 2015. The fiscal position remains highly

constrained, but again there are some signs of improvement. After a large drop in revenue in

2014 the government was forced to run down cash balances to meet recurrent costs, and reduce

some operational expenditure on things like maintenance. As the economy recovers we are also

seeing a recovery in revenue, with projected revenue about 10 percent higher in 2015 than in

2014; though this is still less than the 20% needed to balance the budget. The government is ex-

pediting the introduction of new taxes (telecom top up fee) and increases in fuel import fee as

well as the Business Receipt Tax (BRT) to achieve the year’s revenue target.

Banking sector reform is underway. Balance sheets are being cleaned up and stress tests to iden-

tify weaknesses are being carried out. The government has also made significant progress in es-

tablishing a sound legal framework for combatting money laundering and the financing of terror-

ism, with plans for intensified enforcement.

The government has launched an ambitious reform to improve public financial management that

will use a reformed budget process to align government expenditure behind national priorities,

provide incentives for better implementation, and link reporting back into the strategic planning

process. The government is setting out a clear fiscal strategy with achievable goals. At the heart

of this strategy are sustainable government finances through a single national budgetand the in-

troduction of multi-year fiscal frameworks for better budget management and predictability.

Government actions to improve performance on social development and human rights are un-

derway. Afghanistan’s press and social media are amongst the freest in the region. Civil society

faces no significant institutional or regulatory restrictions although for both press and civil socie-

ty there are still challenges posed by unauthorized individual abuses. Despite deep challenges

and embedded opposition, the senior most parts of government have demonstrated a firm com-

mitment to support women’s civic rights and advance their role in the government and economy.

While the government has made a positive start on reforms, there are areas where implementa-

tion of the Self-Reliance agenda has not been as rapid as hoped. Some, though not all, of the rea-

sons for slow progress are due to extraordinary factors that are beyond the government’s control.

The ferocity of the Taliban assault in the wake of the withdrawal of international forces has

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shifted the focus of the government to a war footing that has tied up Afghan managerial re-

sources and attention as well as put pressure on the national budget. In addition, the structural

and legacy problems within government —endemic corruption, a lack of managerial capacity, a

weak justice sector —were even more embedded and difficult to shift than initially anticipated.

Controlling human rights abuses and changing attitudes towards women, many of which are not

endemic to Afghanistan but have arisen over the war years, require vigilance and persistence. All

of these issues will require sustained long-term reforms to fix.

Some factors for delay are also a result of deliberate choices made in the midst of difficult trade-

offs. Overcoming the divisiveness of the election to build the unity government was a difficult

and time-consuming process, but the important outcome that the senior leadership of the Unity

Government can now present a shared vision for national development, was worth the invest-

ment in time that reaching this consensus required. Anti-corruption programs, when taken seri-

ously, inherently involve slowdowns in implementation until new, transparent, and competitive

systems are put in place.And while stakeholders rarely agree on everything in Afghanistan, there

was a universal consensus that ending the debilitating corruption, collusion, and nepotism was a

national priority.

Other challenges are under the government’s control and, as this report acknowledges, will re-

quire concerted action to overcome. Sub-minister level appointments of qualified deputies, gov-

ernors and others are prerequisites for effective implementation of reform programs. Justice sec-

tor reform is critical for building trust that government institutions execute the law fairly. Private

sector development continues to be impeded by excess red tape and lower level rent-seeking.

The government must put in place a fiscal strategy that will make the budget sustainable in the

long term through increased revenue and more efficient investments in capital and services.

Dialogue breeds the confidence to change: Trust is being rebuilt and the government has a

credible reform strategy in place. A productive dialogue over how Afghanistan’s partners can

best support the self-reliance agenda is timely. Based on recent discussions with our develop-

ment partners, some of the development modalities built up over the past decade and a half are

no longer appropriate for the country’s changing environment andthe lessons learned about sus-

tainable development now need to be applied.

The goal of the government is self-reliance not perpetual aid-dependency. Development coopera-

tion can now shift from implementing projects to building systems. From a development per-

spective, fundamental to Afghanistan’s successful achievement of the self-reliance strategy will

be reforms to the budget process that put the government fully in control of domestic policy im-

plementation and therefore make it fully responsible for its outcomes. Rebuilding Afghanistan’s

human capital, including a civil service that can credibly perform core government functions, is

equally important if self-reliance is to be achieved.

Organization of the Paper: This paper provides the Senior Officials Meeting with the govern-

ment’s assessment of the progress that has been made since December 2014 under the “Realizing

Self-Reliance” reform strategy. We recapitulate the main commitments, assess what has been

delivered, and summarize the next steps.

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The Government is committed to candor not just in its interactions with donors, but also in its

evaluations of its own performance. For that reason each section includes the government’s self-

assessment rating through an A-F scorecard. The scores put forward in this report are not intend-

ed to be precise measurements; an “A”means that we think that overall performance in 2015 is as

good as could have been expected; a “C”would mean “average”but needing significant im-

provement; while an “F”would stand for deep discontent andapproaching crisis. The government

is preparing more carefully quantified, individual balanced scorecards for each ministry. Howev-

er, an overall, comparative view of perceived strong and lagging areas will help guide a produc-

tive SOM discussion.

The paper presents summaries and highlights; it is not a comprehensive review of each commit-

ment. However, annexes 1 & 2 provide tabular presentations of performance against the 25 Self-

Reliance short-term priorities and the 2012 TMAF hard deliverables.

This paper was prepared in tandem with the national development planning paper. The two

should be read together. While “Realizing Self-Reliance: The First Mile” provides a progress re-

port on the aspirational goals for reforming Afghanistan’s development machinery, the national

development planning paper provides the first concrete illustration of how to put those priorities

into action from within country systems.

Finally, this report is meant to review progress on the start of the “Realizing Self-Reliance” re-

form plan and is not a final evaluation or even a mid-term progress report. The government has

been in power for less than one year and has only had a complete Cabinet since May 2015.

Judgments should be primarily about whether the government has satisfactorily advanced to the

starting gate, not to the finishing line.

II. Progress on Realizing Self-Reliance:

A. Improving Security and Political Stability

The two biggest challenges for the new government were to forge unity after the election and to

prove that the Afghan armed forces could contain the heightened Taliban assault.

What We Promised: The unity government committed to reforming the electoral process and to

introducing civilian controls over security sector management.

What We Delivered:

The most important action was the inauguration of the Special Commission on Electoral Reform,

which was endorsed by the full government leadership. Recently, the Commission submitted the

first phase of recommendations to the Chief Executive and President. But equally significant was

the joint submission to parliament of a unified list of ministers who had been selected on the basis

of their merit, experience and reputation for integrity. The result is a fresh, highly qualified cabi-

net that has the full support of the country’s top leadership. The government will come up with a

timeline for parliamentary and district elections as soon as the Electoral Reform Commission

gives its recommendations. The appointment of governors is also largely complete. Again, merit

and experience, not patronage, guided selection. While there have been some accommodations

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with regional power-holders, for the most part the new governors have started off well and are

supported by the population. Finally, the government re-confirmed its intention to hold mayoral

elections within two years.

Progress on security sector reform has been uneven. Despite the lack of a confirmed defense

minister until August 2015, reform of the defense ministry has moved forward as evidenced by

the current high morale of security forces and the increasingly effective management of the de-

fense strategy. The introduction of civilian oversight through the National Procurement Commis-

sion (NPC) has been particularly effective. It has already started to reduce previously high and

damaging levels of corruption, producing not only significant savings to the government in what

accounts for more than half of total government expenditure, but, more importantly, ensuring

that soldiers in the field receive proper equipment and support.

Reform of the Ministry of the Interior has been more difficult. There has been high resistance

internally to civilian systems for fiduciary controls, procurement, and human resource manage-

ment. The joint work to reform the deeply problematic Law and Order Trust Fund for Afghani-

stan (LOTFA) highlighted how entrenched the problems are and how much more work the gov-

ernment still needs to do. Agreement was reached on a LOTFA handover action plan, but the In-

terior Ministry will require extensive additional reforms before it can credibly manage the funds

directly.

Greater respect for human rights and the rule of law complement improved security.Other sec-

tions of this paper discuss the legal reform plan that must underpin progress on human rights. For

the security sector, emphasis will go into heightened training for security personnel on human

rights, improved monitoring and review, and reinforcing the government’s ongoing commitment

to support human rights defenders.

Next Steps: Follow-up actions on the political front will include supporting the work of the

Electoral Reform Commission, holding parliamentary and district level elections, and continu-

ing efforts towards effective functioning of the National Unity Government.

Government Scorecard:

The government believes that high marks are deserved for the successful cooperation of the top

leadership that has made the National Unity Government a success and for the actions to support

the ANSF through better management. Reform of the Ministry of Interior has not progressed as

quickly as needed, and, while the challenges of reform whilst fighting a war must be acknowl-

edged, the new government will have to work harder to improve the security sector’s manage-

ment, reduce corruption, and promote respect for human rights throughout this ministry.

The government’s overall scorecard rating in this area is B.

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B. Tackling the Underlying Drivers of Corruption

The President and the CEO are united in their commitment to root out corruption from the Gov-

ernment. While the leadership’s commitment to ending corruption is unimpeachable, implemen-

tation of the anti-corruption program has highlighted how deeply embedded corruption has be-

come.

What We Promised: The government’s analysis promised action on five underlying drivers of

corruption: (i) official tolerance of collusive practices; (ii) lack of oversight; (iii) un-enforced

sanctions; (iv) arbitrary regulations that encourage rent-seeking; and (v) corruption in the legal

system. A top “signaling” priority for both donors and the new government was decisive action

on the Kabul Bank scandal. Even before the London Conference, the government had stated that

prompt action on the Kabul Bank case would be the bellwether of its credibility on fighting cor-

ruption.

What We Delivered: The government has acted on all five reform areas. Immediate action on

the Kabul Bank case broke the aura of impunity that had surrounded high level malfeasance. Not

only were senior officials prosecuted, but over US$ 228 million were recovered and returned to

the national treasury, with further recovery efforts still underway. The government has gone

ahead in streamlining the governance of anti-corruption efforts by removing duplication or over-

lapping of responsibilities amongst the anti-corruption agencies, mainly the Attorney General’s

Office (AGO) and High Office of Oversight (HOO). The HOO will be concentrating on register-

ing assets of government officials while AGO will be pursuing and prosecuting corrupt officials.

Assets of 23 out of the 25 Cabinet officials under article 154 of the Afghan Constitution have

already been registered.

The customs and revenue departments, considered hotbeds of corruption, have undertaken a

comprehensive reform and initial results are already visible. Leadership and administrative

changes, human resource management reforms, streamlining of procedures to make them trans-

parent and objective, and the automation of systems are some of the initiatives taken to fight cor-

ruption in these departments. In particular, the Ministry of Finance has taken control of the cus-

toms police, introduced tracking devices for transit vehicles, piloted E-payment at Hamid Karzai

International Airport inKabul, and constituted a review committee that has already visited nine

provinces to review senior staff (grades 1 & 2). Customs revenue projections for 2016 are pro-

jected to rise significantly.

The lack of credible, competitive public sector procurement processes may well be the single

biggest driver of corruption within government. “Realizing Self-Reliance” proposed setting up a

new, temporary National Procurement Commission directly under the country’s top leadership to

oversee high value contracts. This approach was not supported by everyone, but the weekly en-

gagement of both the President and the CEO with the National Procurement Commission (NPC)

has sent unambiguous messages across the government that high level corruption will not be tol-

erated. Annex III summarizes NPC actions to date. Adding 35 trained staff has strengthened the

Supreme Audit Office, which in 2015 carried out audits of four line ministries that together ac-

counted for 60% of public expenditure. All four were found to be compliant with the World

Bank’s Incentive Program benchmarks.

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Legal reform has also started. The new Chief Justice of the Supreme Court has an unblemished

reputation for integrity. A presidential review of prosecutors found that a significant number of

them did not have appropriate qualifications. However, the lack of a confirmed Attorney General

has hampered progress on legal sector reform.

Next Steps:The fight against corruption is just one part of a broader struggle to bring under the

rule of law a large criminal economy -in Afghanistan this is mostly but not solely referring to

narcotics -that extends far beyond Afghanistan’s national borders. Afghanistan’s growing confi-

dence in its security forces will allow for heightened actions against the narcotics-insurgency

nexus. And Afghanistan’s much improved relations with its neighbors will allow for stepped-up

enforcement against transnational criminal networks.

In 2016, five areas will be particularly important and the main focus in reducing corruption with-

in the bureaucracy. First, control of the customs police is being transferred to the Ministry of Fi-

nance. Improved management systems are now needed for successful integration. Second, indi-

vidual ministry construction wings will be closed. Government construction will be consolidated

under a professionally managed government services agency. Third, the government will work

towards the declaration of 100% of senior officials’ assets as per article 154 of the Constitution,

with a specific commitment to complete at least 90% by the end of 2016. Fourth, at least five

revenue based ministries (Ministry of Finance, Ministry of Mines and Petroleum, Ministry of

Commerce and Industries, Ministry of Transport and Civil Aviation and Ministry of Communi-

cation and Information Technology) will adopt anti-corruption action plans. To help embed these

plans, the government will be rolling out the purchasing module of AFMIS, the government’s

expenditure management system. Using this module across the finance system will allow for a

shift to e-procurement, which will become compulsory for all public procurement. Lastly, the

government is expanding its use of risk-based audits.

An over-riding and urgent challenge is to bring the fight against corruption down to the level of

the common man and woman. High level actions against grand-scale corruption in banking, pro-

curement, and natural resource licensing have not yet had tangible effects on lower level offi-

cials’ rent-seeking. Bribery and extortion still plague the badly needed business sectors, which

are being squeezed as other sources of corrupt income diminish. Over the coming year, the gov-

ernment will increase its use of surveys, monitoring, and direct dialogue with the private sector,

citizen’s groups, and civil society to build coalitions that will increase reporting and enforcement.

Finally, Afghanistan must stay the course with the reform strategy underpinning “Realizing Self-

Reliance.”Appointing a qualified Attorney General who can anchor prosecutorial reform is an

urgent priority and is listed as a 2016 SMAF indicator. Improved public sector management,

comprehensive reform of the legal sector, and reducing arbitrary regulations that promote rent-

seeking will remain at the core of the anti-corruption action plan for 2016.

Government Scorecard: The right building blocks are in place and prompt action on the Kabul

Bank case has sent the right signal that the era of impunity is over. However, the lack of an At-

torney General to launch legal sector reform and the increase in lower level harassment justify a

reduction in the government’s score. The fight against corruption must improve the lives and

views of ordinary Afghan citizens.

10

The government proposes a B-for this area.

C. Building Good Governance

The public administration inherited by the National Unity Government was deeply dysfunctional.

Introducing comprehensive reform to governance is central to the TMAF and “Realizing Self-

Reliance” agendas. The Civil Service Commission has not provided the quality civil service sys-

tem that the government needs and must be reformed. Ministries’mandates overlap, causing con-

flicts rather than cooperation. Patronage is rife and too many ministries are stuffed with ghost or

unqualified staff. The budget focuses too heavily on ex-ante expenditure controls, some of which

are duplicated and achieve little, while a basic framework of producing budget statements that

are then reported on at the end of each year in annual reports is missing. This means that ex-

penditure controls make it difficult to get authority to spend money, but once approval is given,

there is inadequate oversight of what happens to public investments. The lack of standardized

national auditing rules has been identified as a barrier to effective fiduciary oversight. In prac-

tice, each ministry produces its own budget and accounting reports. These are manually recon-

ciled, building in significant scope for error and malfeasance. For various historical reasons, the

government’s core information systems cannot easily share information with each other.

What We Promised: The government committed to move public service from a system current-

ly constructed around patronage and loyalty to one built on the basis of rules and merit. This sec-

tion therefore focuses on progress to professionalize public administration.

The first and most important reform is only somewhat quantifiable, but it is critical. The gov-

ernment’s decision early on to not have any minister or governor from the previous administra-

tion continue in their position sent a clear signal to the Afghan population that there would be a

fresh start, not just an electoral flurry and then more of the same.

What We Delivered: Three actions have put in place the building blocks for the “Realizing Self

Reliance” reform agenda. First, the new cabinet has indeed brought in younger, more profession-

al leadership.

Second, the strategic overview of Public Financial Management Reform (PFMR) II roadmap,

that will turn the budget into the government’s tool for policy execution and financial sustainabil-

ity, has been drafted and circulated to relevant stakeholders for comments. Work on developing

an implementation plan for PFMR II has also started. The Finance Ministry will consider creat-

ing a macro and fiscal policy unit reporting directly to the minister that oversees the roadmap,

increases coordination between the policy, treasury, budget, and domestic revenue units of the

ministry, and carries out quarterly budget reviews. Reforms are being presented in a rolling Fis-

cal Performance Improvement Plan (embedded within the roadmap) that focuses on performance

and continuous improvement. Annual performance assessments will ensure that the government

is adjusting plans and monitoring progress. Reforms are linked to international benchmarks

through aspirational targets that will bring greater transparency and accountability to the process.

Annual performance reports will be published. Work will also start on bringing the various man-

agement information systems into a single, user-friendly technology platform.

11

Third, the government and donors have also reached agreement on how a reformed public ad-

ministration can best be supported. First, the umbrella mechanism to build civil service capacity

is the revitalized “Capacity Building for Results” (CBR) program supported by the Afghanistan

Reconstruction Trust Fund (ARTF). The restructuring decree was signed on July 29, 2015. Sec-

ond, to avoid and hopefully reverse the bleeding of qualified civil servants into donor-supported

programs, large donors, including the UN, will adopt invoicing scales for their contractors that

are aligned with the CBR pay scale for qualified specialists. Third, reform ministers will work

with professional help to improve workplace conditions so that public service becomes attractive

to professionals, including strict implementation of “safe workplace” anti-harassment guidelines.

Next Steps:Now that the architecture of a revitalized public administration is in place, the focus

will be on implementation. First, aided by CBR, ministries must prepare strategic human re-

source management plans that align their staffing against their ministry’s objectives. Ministries

will complete their tashkeel and finish appointing qualified officials to senior positions, particu-

larly deputy ministers and director generals. The government will also work with donors to adopt

a phased approach for the transfer of off-budget technical assistance into government positions.

Second, ministries must follow standardized accounting, classification and reporting procedures.

And third, the President, CEO, and Ministerof Finance will form a high level delivery unit that

will monitor implementation and help ministers overcome bottlenecks.

Adraft policy on sub-national governance has been prepared and will be introduced to Cabinet

before the end of 2015. In 2016, the government will work to increase the fiscal authority of

governors, increase the government’s permanent presence in districts, and begin work on eco-

nomic master plans for Kabul and the four largest cities.

Good governance must also include respect for human rights and their enforcement through

laws. In 2016, the government will prepare a comprehensive legal reform road map that will in-

clude proposals for expanding access to justice, implementation of the government’s Constitu-

tional and international commitments on human rights, and improved mechanisms for legal re-

view and appeal. If the security situation permits, UN Special Rapporteurs on violence against

women, extrajudicial killings, and torture will be invited to meet with government and civil soci-

ety to review progress and discuss action plans to build domestic constituencies for human

rights.

Government Scorecard: Public sector reform is inherently a slow process. However, in the

government’s view, the alignment between public debate over a national development strategy

carried out through elected officials and parliament; the reduction of National Priority Programs

(NPPs) to a manageable number; and the structural reforms to the budget process for the first

time provide the basic building blocks of a qualified, accountable public administration.

The government’s proposed score is B+.

D. Restoring Fiscal Sustainability

What We Promised: The new government inherited an economy in crisis. Growth had dimin-

ished, dropping to 1.9% in 2015. The gap between spending and revenue was so large that the

government faced a fiscal crisis. Afghanistan’s already low rates of revenue collection were

12

dropping due to decreased trade and leakage. Tax evasion was so rampant that taxpayers were

virtually considered to be aberrant.

The new government moved quickly to establish a short-term stopgap program and the frame-

work for long-term reform. Key to the short-term program was agreement with the IMF on a

Staff Monitored Program (SMP). This was achieved by June 2015, with a plan to roll it into a

three year program for structural reform. The program covers reforms to macroeconomic gov-

ernance; the banking sector; improvements to tax, tariff, cash, and budget management; and

promoting private sector development through regulatory reform.

What We Delivered: The SMP is on track. Growth is projected to riseby 1.9% in 2015. Reve-

nue collection has increased by some 10% since the government came in, albeit on a smaller

scale overall. While this is less than the 20% target needed to balance the budget, the government

does not consider that target to have been realistic, especially given the uncertainty brought

about by the lengthy electoral transition. Last year’s US$260 million fiscal gap has been signifi-

cantly reduced although the budget is still cash constrained. Banking sector reform is progressing

with the four largest banks hoping to soon comply with international accounting and manage-

ment standards. Pension reform has started (and the responsible ministry restructured).

The Ministry of Finance is operating a full court press to increase revenue collection. As noted

previously, the customs police are now being transferred to the Ministry of Finance. The core

modules of the Standard Integrated Government Tax Administration are now being full imple-

mented in the Kabul Large and Medium Taxpayer’s Offices and partially implemented in the

Kabul Small Taxpayers Office and in Balkh, Herat, Nangarhar, Kunduz, and Kandahar provinc-

es. The Ministry of Finance has raised tariffs on fuel, phone cards, air transit and cigarettes.

Customs reforms are being implemented including changes to human resource management and

introduction of the ASCUDYA World system and e-payments.

Next Steps: The key action for 2016 will be completing the current SMP and reaching early

agreement on the three year IMF program. ARTF’s Incentive Program and USAID’s incentiv-

ized New Development Partnership support ambitious but achievable reform programs. The fol-

lowing additional actions are envisaged:First, compliance with the Extractive Industries Trans-

parency Initiative (EITI) will be important not only for accountability, but to ensure that the gov-

ernment captures its full share of royalties and taxes. Second, in order to capture more revenue,

in 2016 the Ministry will begin to match the investments that have to be made in expenditure

control with the missing investment in revenue collection. Third, ease of customs and border

passage will be monitored closely and business visa applications streamlined. Fourth, govern-

ment budget assumptions will be revised more carefully for their realism so that revenue targets

become credible management tools for policy makers. Finally, the government will ensure that

contracts are negotiated more carefully than they have been in the past in order to ensure proper

levels of long-term government revenue streams.

Government Scorecard: Reforming fiscal policy and making public finances sustainable is dif-

ficult because changes inherently affect powerful interests. The scope for government action is

also highly constrained due to compulsory commitments to high levels of security spending and

protecting social spending.

The government’s proposed score is B+.

13

E. Reforming Development Planning and Management

“Realizing Self Reliance” identified three overarching problems with how development was be-

ing managed. First, for nearly all sectors, the government lacked strategic development plans that

set clear objectives, introduced common standards, and ranked investment priorities using com-

mon criteria. Second, while annual execution rates were mostly good, overall disbursements

were very slow (a sign of bad design planning). Third, unit delivery costs in Afghanistan are very

high, even taking into account the terrain, conflict, and lack of local capacities.

What We Promised: The government has approached reform in an integrated way. First, mov-

ing the government to a four year budget framework allows for strategic planning. Second, the

public financial management reform being launched in the Ministry of Finance provides, as a

central feature, the ability for the ministry to annually re-allocate money away from poor-

performers to good-performing sectors. This will remove the incentive for ministries to accumu-

late individual project “war chests” that they either lack the capacity for or interest in disbursing

even when they perform poorly. Third, sectoral guidelines for the national priority programs are

paying close attention to design features that raise unit costs, such as individually tailored pro-

jects that preclude realizing economies of scale for construction and maintenance.

What We Delivered: All ministries completed 100-day action plans, several of which received

positive feedback. A first round of presidential-level portfolio reviews provided the strategic vi-

sion to develop the national priority programs. The key priorities and work plan of the Chief Ex-

ecutive Office, outlining priorities, initiatives and a range of short, medium and long term activi-

ties, were developed, shared with the councils of ministers and is currently being finalized. Con-

cept notes for the Citizen’s Charter, Rural Development Program, Urban Development Program,

National Women Economic Empowerment Plan, and National Infrastructure Planhave already

been prepared for the Cabinet review, with four more to be launched post SOM. The government

is in the process of introducing a coordination structure based on the development coordination

councils to oversee development planning, spending, implementation and monitoring. The repri-

oritized national priority programs along with the new coordination structure will form the vehi-

cle for achieving development results as envisaged in the Self-Reliance Paper.

Against this progress, the slowing down of disbursements in most ministries and the ongoing

lack of concerted action to clean up existing portfolios is a demerit. The government completed

diagnosesto identify causes of disbursement delays. Whilst some are attributable to disruption

from transition or poor management, the majority are due to poorly designed programs and over-

ly rigid fiscal systems that provide the wrong incentives to ministries. This problem will be ad-

dressed through the PFMR II roadmap and a strengthened delivery oversight structure.

Next Steps: The government will complete the appointment of technically qualified deputy min-

isters and directors. The government will then undertake systematic reviews jointly with its large

donors to prepare action plans for poor performers, includingpartial and full project cancellations

if necessary. Work on the critical national infrastructure plan is already launched with a planned

delivery date in early 2016. Preliminary concept notes for the consolidated National Priority Pro-

grams will bediscussed with stakeholders and then approved by the Cabinet.

Government Scorecard: This area was meant to put in place a framework that will let devel-

opment planning move into sector wide approaches. The government’s frank assessment is that

14

the building blocks for better government planning and management are the right ones, but that

the urgency of the security issues has somewhat detracted high level attention away from ad-

vancing this item as much as would otherwise have been possible. Furthermore, without in-

creased budget flexibility, the government still cannot fully use the budget to manage develop-

ment spending.

Therefore, the government proposes a ranking of C+.

F. Bolstering Private Sector Confidence, Promoting Growth, and Creating Jobs

What We Promised: The government promised to concentrate on three areas that would lead to

private sector growth. First, Afghanistan’s overall investment climate would be improved

through better and more predictable regulations. Finding ways to reduce land conflicts was to be

an especially important step. Second, agricultural productivity, natural resource development

(primarily mining and hydrocarbons), and expanded regional trade would become the economy’s

locomotives. And third,DAB would be capably managed to provide effective financial sector su-

pervision and support.

What We Delivered: Several of the reform commitments in this area are covered by the IMF

program. By the time of the SOM, the government will have issued a revised banking law.

Increasing private sector confidence has been the most challenging part of the reform agenda.

Clearly, the overarching reason for these problems has been the spread of the insurgency and the

insecurity that it creates everywhere. Without greater security and less risk of violence there is

not much chance of a big leap in private investment, especially by overseas investors. But ac-

tions under government control can move faster than they have so far. More progress in the fight

against corruption described in section B above is particularly important to create a stable and

predictable investment climate. Petty harassment of Afghan businessmen is reported to have in-

creased. Deregulation of excess red tape and clarification of regulatory responsibilities amongst

agencies also did not move as quickly as it should have. Overlap of responsibilities between gov-

ernment entities continue to lead to approval and licensing delays. Political intervention in the

private sector and inappropriatelinks between politicians and businesspeople remain endemic and

have not been addressed sufficiently.

The government is taking steps to improve its ranking in the World Bank Doing Business Indica-

tors (DBI). ADBI secretariat has been established in the Ministry of Commerce and Industries to

better coordinate relevant activities and to monitor how reforms to reduce obstacles for business

are being implemented on the ground. The initial phase of streamlininglicensing in Kabul has

been completed. The major achievements of this phase were developing a regulatory framework

that streamlined and automated trade licensing and the Ministry of Commerce signing a contract

to construct a building where all relevant departments will be shifted in order to move towards

one-stop-shop clearances. The government will clarify overlapping roles and duplicated jurisdic-

tions. The Ministry of Commerce and Industries and the Afghanistan Investment Support Agen-

cy (AISA), in close consultation with the private sector, have started work on the investment law,

which will clarify the role of AISA.

15

The government’s actions on the land agenda are promising. Authority over land dispute adjudi-

cation was successfully transferred from the Supreme Court to the revitalized Afghan Land Au-

thority. The government has also advanced on plans to mobilize its landholdings as incentives

for public-private investment partnerships. As for urban areas, the government is working with

donor partners and UN Habitat to launch a nationwide program of survey and certification of all

informal urban settlements, which will clarify ownership, encourage investment, and reduce

people’s fears over illicit land grabbing.

Job creation remains the most serious political challenge for the government. A ceasefire or

peace agreement could bring as many as one million refugees back into the Afghan job market.

Even if all of the economic and regulatory reforms are implemented in full, it will be years be-

fore private sector job creation can equal the demand for employment. This is a critical situation.

Next Steps:While peace remains essential to restoring large scale private investment and growth,

more decisive action to help the private sector create jobs is also important. Far too many rules

and offices exist simply to block entrepreneurial initiatives and to collect bribes. Simplification

and real-time review of as what rules serve what purpose are urgent priorities. The government

will engage more frequently with private sector opinion makers, who can provide the govern-

ment with additional information on priorities and report back on progress. A business simplifi-

cation roadmap will be approved by Cabinet that streamlines in measurable ways: business regis-

tration, construction permits, tax registration and payment, access to electricity, and adjudication

of land disputes. The government will also work with donor partners and private industry leaders

to build the means to systematically and continually monitor the implementation of reforms. The

second phase of streamlined business licensing will complete licensing reform across the prov-

inces.

Afghanistan’s trade balance is unsustainable. We urgently need to begin building the enabling

environment to promote foreign and domestic investment in the country. The government can

also enable Afghan engagement with export markets to provide the price discipline and manage-

rial learning that builds innovation and efficiency. The government will significantly simplify the

visa process and will work with the Afghanistan Chamber of Commerce and Industries (ACCI)

to identify ways for the government to expedite rather than impede exports.

In “Realizing Self-Reliance”, the government proposed using security sector procurement to pro-

vide price signals to rural producers that they can count on rising demand for increased produc-

tion. That is, if the army (and all the other sectors in the future) buys more food and other sup-

plies from local farmers and suppliers, farmers and Afghan businesses will have more incentives

to produce for sale. The architecture for this program is now in place and the first purchase or-

ders should be issued in early 2016.

Government Scorecard: Fixing the financial sector, systematizing investment rules, and at-

tracting investment while discouraging corruption remain the right priorities. However, this must

be supported by increased communication with private sector investors on the real barriers they

face. The government needs to do more and for that reason proposes to award itself a C+.

16

G. Ensuring Citizens’ Development Rights

Afghanistan’s growth model is meant to be inclusive. Afghanistan began 2014 as the fourth

poorest country in the world. At the same time, experience has shown that when they are given a

fair opportunity, Afghans are innovative, entrepreneurial, and hard working. The challenge is

how to bring large numbers of poor people up to a threshold where they can take advantage of

market opportunities to build up their assets, skills, and aspirations.

What We Promised: A Citizen’s Charter will provide communities across the country with a

minimum guaranteed standard of economic infrastructure and development services. The Citi-

zen’s Charter will be built around local development plans prepared through broad-based partici-

pation and within annual envelopes that define what rate of progress is fiscally sustainable. Re-

sponsibility for monitoring their implementation will sit with provincial governors. The govern-

ment’s development strategy also includes aligning education with job market opportunities and

easing barriers to labor mobility.

Afghanistan’s leadership has also made unequivocal commitments to advancing the development

rights of women. The strategy announced in the “Realizing Self Reliance” paper was built around

three pillars: (i) consolidating women’s human rights, in particular reductions in the levels of vio-

lence against women; (ii) increasing women’s economic role in society bydeveloping a national

economic empowerment program for women; and (iii) increasing the number of women in pub-

lic sector positions.

What We Delivered: The government has clearly made an unambiguous commitment to sup-

port gender rights in national development even in the face of opposition. Women have been

named to an unprecedented number of high level positions in the government. Violence against

women remains deplorably high, but it is no longer officially tolerated and prosecution of of-

fenders is on the rise. In “Realizing Self-Reliance,” the government committed to reviewing the

cases of all Afghans including women and girls imprisoned for non-capital crimes. All cases

were reviewed and of the 402 femaledetainees 255 have been released.

Both the Citizen’s Charter and the National Economic Empowerment Plan for Women are ad-

vancing well. The President also signed the National Action Plan on UNSCR: Women, Peace,

and Security. To date, despite the economic crisis, both primary health and education budgets are

being protected. Dialogue on improving the treatment of Afghan refugees in neighboring coun-

tries is ongoing and has been raised to the highest levels of host governments.

Not all progress has been positive. The government has flagged concerns over corruption and

performance in both government and donor programs for health and education. Reporting of

such problems is already an improvement and actionsare being taken to address them.

The government remains firmly committed to its human rights obligations. It has continued to

protect the autonomy of theHuman Rights Commission. There has been no censorship of the

press or restrictions on civil society organizations. As a result, Afghanistan continues to be

among the most open countries in the region for the press, media, and civil society despite the

ongoing problems of conflict, corruption, and extremism.

17

Afghanistan’s strategy for implementing its human rights obligations is built around three pillars.

First, respect for human rights must become rooted in Afghan society through civic education,

media awareness, and changing cultural norms. Civic advocacy will play a particularly important

role in this. Second, public institutions must take on specific responsibilities for monitoring im-

plementation and for developing the internal rules, procedures, and sanctions to regulate gov-

ernment behavior. Third, enforcing human rights norms is a subset of Afghanistan’s need for le-

gal sector reform and development. However, experience shows that while legal sector reform is

a pre-condition for effective implementation of human rights commitments, the specific issues

that surround human rights monitoring, training, and follow-up action require explicit programs

within the overall justice sector roadmap.

Next Steps:Both the Citizen’s Charter and the Women’s Economic Empowerment Program will

enter the 2017 budget. By the end of 2016, every government ministry will have at least one fe-

male deputy minister. The government will issue safe workplace guidelines for public sector em-

ployees. The memorandum of understandingbetween the government andcivil society will be

ready for SOM after which the Self-Reliance programto build a domestic enabling environment

for civil society can proceed.In “Realizing Self-Reliance”, the government committed to provide

a budget line for the Human Rights Commission. This has been achieved.The Sub-Committee on

Accreditation of the International Coordination Committee for National Human Rights Institu-

tions (ICC) granted the AIHRC with “A” accreditation for another five years until 2019, which

was officially announced during the 28th ICC Meeting in March 2015.Finally, donors, UN agen-

cies, and the Afghan government will use 2016 to develop action plans for the possible return

and reintegration of Afghan refugees and to improve follow-up to international monitoring of

refugee camps hosting Afghans.

Government Scorecard: Despite the substantial progress, it is difficult to assign an overly high

grade when so many Afghans are suffering the effects of unemployment and the failure of devel-

opment to provide them with basic services. Therefore,the government proposes a score of B-

with a caveat that improvements to this score lie at the heart of mutual accountability for both

sides of our development partnership.

H. Regional Economic Cooperation

The new government’s regional diplomacy has been both a focus of its political and economic

strategy and a highlight of the first year’s achievements.

What We Promised: The new government committed to transforming Afghanistan’s relation-

ships with its neighbors from being primarily state-to-state diplomatic partnerships to becoming

the fundamental underpinning for regional peace and security. For that purpose, most of the gov-

ernment’s first few months in office were invested in building confidence, participating actively

in regional dialogues, and advancing cooperation to promote regional integration through eco-

nomic and political cooperation.

What We Delivered: Even our critics would find it difficult to argue that progress in these areas

has not been a highlight of the administration’s first year, but it is worth looking in some detail at

the actual achievements. First, high level interest in regional cooperation and the use of regional

18

leadership forums to advance a common agenda has never been higher. Second, Afghanistan has

become a focal country for building a united front across the region to stop the spread of extrem-

ism. Third, there are discussions about building a common area of economic cooperation similar

to ASEAN or the Common Market. Fourth, Afghanistan has negotiated several large bilateral

partnership agreements that will promote large scale and cross-border investment, trade, and cus-

toms cooperation. And fifth, Afghanistan has made significant progress on freeing up cross-

border investments that had been stuck in bureaucratic foot-dragging, such as the Central and

South Asia (CASA 1000) and Turkmenistan-Afghanistan-Pakistan-India (TAPI) energy pro-

grams.

Next Steps:The coming year must build on the first year’s initiatives to advance regional integra-

tion. Afghanistan now needs to increase the number of crossings at its borders, develop dry ports

to advance trade and transit agreements, increase customs cooperation, improve cross border

connectivity (roads, railway, airspace, fiber optics, etc.), enhance regional energy cooperation,

and implement and monitor foreign investment agreements. Multi-lateral trade and transit coop-

eration agreements will be explored. Bi-lateral banking cooperation, especially between Central

Banks, will be established and advanced cultural and educational exchanges will be promoted.

The government will also work closely with experienced partners to negotiate the strategic

agreements on water resources and riparian rights that need to be negotiated before river-based

irrigation and hydroelectric projects can be launched. Following the September 3-4 RECCA

meeting, priority regional projects will be advanced for detailed feasibility assessments and de-

sign.

Government Scorecard: The government is very proud of achievements in regional diplomacy

and feels confident in awarding itself anA.

I. Reforming Development Partnerships

Towards the end of the previous government, relations with the international community had

soured. “Mutual Accountability” had increasingly become conditionality born out of distrust on

one side and resentful evasions on the other.

The new government set out to transform that relationship. Key elements of the transformation

have been increasing dialogue, adhering to the principles of TMAF, and working with partners to

identify the kinds of systems that Afghanistan will need to realize its Self-Reliance agenda.

What We Promised: The London Conference discussions were intended to provide the roadmap

to rebuild confidence in that the government would implement a credible reform agenda.Our

promise was that by the time of SOM we would have advanced far enough along that roadmap

— our first mile — to allow for a mature discussion on how to align the modalities of develop-

ment cooperation with the system-building approach of the self-reliance strategy.

What We Delivered. —The status of 25 short-term priorities is summarized in annex I. The sta-

tus of progress on TMAF“hard deliverables” is given in annex II. The government conducted

portfolio reviews and provided high level guidance to donors on the government’s priority areas

and our proposed approaches to achieve results. We also completed a review of the UNAMA

mandate and negotiated a second phase of the ARTF’s multi-sector incentive program for re-

19

forming core systems. Finally, the problematic but critically important LOTFA program was re-

structured.

Next Steps:The government has tabled an agenda under short-term priorities to be discussed and

concluded at the 2016 ministerial meeting. Its essence is that self-reliance requires the bulk of

foreign assistance, which should move to a system of flexible contributions that would allow the

government to use the budget to reward and sanction performance. Donors should also help the

government ensure that the culture of tax avoidance is changed. With such a large share of gov-

ernment expenditure coming from external financing, the government and its partners need to be

consistent: all Afghans should pay taxes for the public services that they receive. Finally, the full

implementation of commitments to report all aid expenditure is not only good practice but also a

pre-condition for effective accountability.

Conclusion

The goal of this paper has been to provide a first “temperature check” on progress on the Self-

Reliance development strategy in the ten months since the London Conference. That strategy

consists of building the economy through trade and productive investment; providing a govern-

ment that operates on the basis of rules and service to the people; and rebuilding trust in a coun-

try that has suffered nearly 36 years of war, poverty, and conflict.

There is no gainsaying the fact that the first year has been difficult. Building a unified national

government took time and effort. The massive attack by Taliban on our civilian population and

the rise of the even more brutal ISIL has further eaten into the resources available for reform.

The depth of corruption and its presence in the bureaucracy went even deeper than anticipated.

This self-assessment has argued that many of the most important reforms are on track and are

heading in the right direction. Key for sustaining progress in 2016 will be maintaining fiscal dis-

cipline, having the focus that will be needed to build a productive economy, and increasingly

delegating responsibilities to the restructured ministries and provincial governments.

Even if the building blocks for Self-Reliance are moving into place, there are still areas where

much more work is needed. Two that top the list are investment climate reform and dialogue

with the private sector on how to move off aid and into sustainable growth; and building a credi-

ble justice sector that can advance the rule of law. Neither can be achieved without continuing

the work to root out corruption. And little will come of our long-term visions if in 2016 the

economy does not start to create jobs and security does not improve.

While the responsibility for building a self-reliant Afghanistan lies fully with the government,

making self-reliance a reality requires that we change aspects of our engagement with partners.

For the decade following September 11, 2001, the priority for both government and our partners

was to rebuild. Although much has been achieved, the systems that allowed donors to provide

large volumes of assistance must now evolve into systems for sustainability and growth. Once

again, the government is first and foremost responsible to make this happen. What we want from

partners is the dialogue and flexibility for building effective, sustainable systems that the Afghan

government and people can run by themselves.

20

Afghanistan’s vision for self-reliance extends beyond our national borders. We have made clear

commitments to becoming a member of the world community of peaceful, democratic countries

that prosper from trade, respect human rights, and share prosperity with our citizens. These are

not just abstract principles. They are guiding our dialogue with neighbors, our support for do-

mestic freedoms, and our investments in human capital.

This report has described progress after our first mile, the slightly less than one year that has

passed since our government took office. We are under no illusions that the future is going to be

anything other than a long and challenging journey. But we believe that beneath all of the many

problems that affect Afghanistan today, the building blocks of self-reliance are being put in place

and the process of serious reform has started.

21

22

Annex I: Status of 25 short-term priorities from Self-Reliance Paper.

# RSR*

Area #

Short Term Deliv-

erable From RSR # Indicator Status Update

Responsible

Agency

1

Tac

kli

ng

under

lyin

g d

riv

ers

of

corr

upti

on

1

Establishment of Na-

tional Procurement

Committee

1

National Procurement

Committee established

and operationalized.

The National Procurement Commis-

sion (NPC) was established on 10

February, 2015 and has been regular-

ly reviewing the contracts since then.

The NPC, since its establishment, has

consecutively convened 18 weekly

sessions in which 294 contracts have

been reviewed and out of which 219

contracts from various Procurement

Entities worth 43.7 billion AFN have

been approved. Throughout this pro-

cess 8.3 billion AFN has been saved

in approved contracts as compared to

the prices of contracts of previous

years and periods.

President’s Office

2

Strengthening en-

forcement and

fighting corruption

in customs and reve-

nue departments

2

Reform package for cus-

toms and revenue pre-

pared and implementa-

tion started.

The reform package for customs and

revenue has been prepared and is in

the process of approvals at different

levels

Number of initiatives from the reform

package has been already initiated

such as leadership and administrative

changes, human resource manage-

Ministry of Finance

23

ment reforms, streamlining of proce-

dures to make them transparent and

objective, automation of systems.

In particular, CustomsDepartment in

the Ministry of finance is taking con-

trol of custom police, has introduced

tracking devices for transit vehicles,

and is piloting E-payment at the Ha-

mid KarzaiInternational Airport in

Kabul.

3

Review of grades 1 & 2

staff in Customs Depart-

ment completed.

A review committee has been estab-

lished for general review of the Cus-

toms and Revenue Departments and

in particular grades 1 and 2 staffs.

The committee constitutes repre-

sentatives from HR, Admin and Fi-

nance, Treasury, Customs and Reve-

nue Departments. The committed has

already visited tenprovinces namely;

Panjsher, Kandahar, Bamyan,

Nangarhar, Kunduz, Kabul, Kapisa,

Parwan, Laghman, and Kunar.

Ministry of Finance

4

Evaluation of the three

major customs houses

where the ASYCUDA

valuation model has been

already implemented and

extension to additional

three major customs

houses incorporating the

ASYCUDA valuation model was im-

plemented in three major custom

houses namely, Nangarhar, Kabul

and Kandahar on pilot bases.

An evolution of the implementation

in these three custom houses has been

completed and lesson-learned has

Ministry of Finance

24

lessons learned. been identified. The lessons- learned

have been incorporated into the

ASYCUDA valuation model which

has been further implemented in three

custom houses namely, Herat, Aqina

and Hairatan.

5

To facilitate ultimate es-

tablishment of E-

payments in customs,

DAB system upgraded to

be connected with cus-

toms system and com-

mercial banks.

DAB system has been upgraded and

connected with customs’ system and

commercial banks to facilitate E-

payments in customs.

The E-payment system is established

as a pilot project for three months in

Kabul and Hamid Karzai Internation-

al Airport customs. It will be ex-

panded to other customs based on the

lessons-learned.

Ministry of Finance

3

Review roles, re-

sponsibilities and

jurisdictions of anti-

corruption institu-

tions, namely High

Office of Oversight

(HOO) and Attorney

General Office

(AGO), to restrict

them to focus on

their core function of

enforcement instead

of oversight.

6

Anti-corruption institu-

tions' roles, responsibili-

ties and jurisdictions

(High Office of Over-

sight and Attorney Gen-

eral’s Office) reviewed

and necessary actions

taken to restrict them to

focus on their core func-

tion of enforcement in-

stead of oversight.

A cabinet review was undertaken to

streamline the governance of anti-

corruption efforts by removing dupli-

cation or overlapping of responsibili-

ties amongst the anti-corruption

agencies mainly Attorney General’s

Office (AGO) and High Office of

Oversight (HOO). Accordingly, a

presidential decree was issued.

The HOO will be concentrating on

registration of assets of government

officials while AGO will be probing

into corruption cases.

Attorney General’s

Office, High Office

of Oversight and

President's Office

25

4

Code of conduct for

government officials

to prevent partner-

ship between gov-

ernment officials and

businessmen that

reduces competition

and creates monopo-

lies.

7

Amendments made to

existing Code of Conduct

to prevent illegal and cor-

rupt partnership between

government officials and

businessmen.

The Code of Conduct has been re-

viewed and the weaknesses and gaps

were identified. Based on the identi-

fied gaps, the amendments to the

Code of Conduct will be finalized by

end of September 2015 to prevent

illegal and corrupt partnership be-

tween government officials and busi-

nessmen.

Independent Ad-

ministrative Reform

and Civil Service

Commission, Min-

istry of Justice,

Ministry of Com-

merce and Indus-

tries and Legislative

Committee of the

Cabinet

5

Measures to ensure

public declaration of

assets by all gov-

ernment officials

8

80% of new officials of

the National Unity Gov-

ernment under Article

154 (President,VPs, min-

isters, Attorney General,

members of Supreme

Court) of the Constitu-

tion to declare their as-

sets.

23 out of 25 Cabinet ministers have

declared their assets. Overall, 24 out

of 38 government official of the Na-

tional Unity covered under article

154 of the constitution have declared

their assets. In addition, Chief Execu-

tive Officer of the NUG declared his

assets.

High Office of

Oversight and Anti-

Corruption

2

Buil

din

g B

ette

r G

over

nan

ce

6

Strengthening public

financial manage-

ment. New PFM

roadmap prepared

and implementation

initiated 9

New PFM roadmap pre-

pared and implementa-

tion initiated

The first draft of the PFMR II strate-

gy has been prepared and has been

circulated to donors and stakeholders

for feedback and comments. Final

comments have been received and

will be incorporated and is expected

that the final copy will be sent to the

offices of the Deputy Minister for

Finance and the Minister for Finance

on the 1st September.

Ministry of Finance

26

7

Constitution of Elec-

toral Reforms Com-

mission

10

Electoral Reforms Com-

mission constituted

The Electoral Reforms Commission

was established through a presiden-

tial decree on 22nd

July 2015. The

Head of the Commission has been

appointed. The commission has 15

members including the representa-

tives from the United Nations and

Ministry of Justice. The commission

is working on the electoral reform

package which will include measures

in short, medium and long terms. The

commission has started wider range

consultation with various stakehold-

ers such as political parties, civil so-

ciety groups, youth unions,

and others.

President's Office

and Chief Execu-

tive Office

8 Civil Service Re-

forms

11

Enactment and develop-

ment of required regula-

tions, procedures and

guidelines for three laws:

New Civil Servants Law,

Basic Organizational

Law, Administrative

Procedural Law.

All three laws namely, New Civil

Servants Law, Basic Organizational

Law, Administrative Procedural Law

have been drafted.

These laws have been reviewed by

Department of Taqnin and are pres-

ently with Minister of Justice for his

final approval and submission to the

Cabinet.

Ministry of Justice,

Independent Ad-

ministrative Reform

and Civil Service

Commission, Presi-

dent's Office and

Legislative Com-

mittee of the Cabi-

net

12

Designing of the Next

Generation of Public

Administration Reform

Strategy.

The first draft of the Next Generation

of Public Administration Reform

Strategy has been prepared and

shared with the relevant stakeholders

for their feedback and comments.

Independent Ad-

ministrative Reform

and Civil Service

Commission

27

13

150-250 government

staff recruited through

CBR

A facilitating presidential decree

(number 852 dated 27 July 2015) to

streamline procedure and process un-

der CBR has been issued. The pro-

cess is now expected to move faster.

So far, 92 positions have been an-

nounced, 20 positions are in the pro-

cess recruitment and 5 contracted po-

sitions have been finalized.

Independent Ad-

ministrative Reform

and Civil Service

Commission and

Ministry of Finance

9

Preparation of Jus-

tice Sector Reform

Plan

a. Including review

of cases of Afghans

illegally held in pris-

ons

14

Justice Sector Reform

Plan prepared and im-

plementation started.

A working group has been estab-

lished under the chairmanship of H.E

the Chief Justice and has instructed

all the relevant ministries/agencies to

provide the first concept note of the

plan. The first draft of the concept

note is prepared and will be shared

with H.E the president.

President's Office,

Attorney General

Office, Supreme

Court, Ministry of

Justice, Office of

the Special Repre-

sentative for Re-

forms and Good

Governance

15

Time bound plan for re-

view of cases of Afghans

illegally held in pre-trial

detention, without charg-

es or trials, prepared and

at least 25% of cases re-

viewed.

The government has reviewed the

cases of all women detainees. Out of

402 female detainees 255 have been

released.

President's Office,

Attorney General

Office and Supreme

Court

10

Progress of im-

portant laws in need

of review, amend-

ments or implemen-

tation

16

The prioritization plan

for legislative action on

pending laws prepared

and operationalized to

ensure their timely draft-

ing, amendments and ap-

provals.

A prioritization plan for legislative

action on pending laws was prepared

and the following activities were

completed;

1. The list of laws and regula-

tions were prepared.

Ministry of Justice,

Legislative Com-

mittee of the Cabi-

net, President's Of-

fice and Office of

the 2nd Vice Presi-

dent

28

2. The list was submitted to the

cabinet for further discussion.

3. The laws and regulations

listed were approved as priori-

ty.

3

Dev

elopm

ent

par

tner

ship

11

Aid Management

Policy(AMP) ap-

proved and imple-

mented 17

Aid Management Policy

approved by Cabinet

After consultation with selected

number of donors and government

agencies a draft of the policy is pre-

pared and is currently under internal

review. The draft will be finalized

and submitted to the Cabinet for ap-

proval.

Ministry of Finance

18

AMP prioritization plan

finalized and implemen-

tation started

The indicator will be achieved as

soon as the aid management policy is

approved.

Ministry of Finance

12

Donor portfolios re-

viewed and adjust-

ment measures initi-

ated.

19

Portfolios of major do-

nors reviewed, adjust-

ment measures identified

and implementation

started.

Portfolio review of major donors has

been completed under the leadership

of the President. Based on the review

next steps were identified and im-

plementation has started.

Ministry of Fi-

nance, President’s

Office

13

Plan to remove ob-

stacles in order to

route more donor

funds on-budget pre-

pared and implemen-

tation started 20

In order to remove obsta-

cles to route more donor

funds on-budget, a public

expenditure review com-

pleted, report produced

and the implementation

of recommendations

started.

Review of public expenditure was

completed by a team of independent

internal experts. The team has already

prepared: a- Strategic overview- de-

velopment and public financial man-

agement, b- Afghanistan: A fiduciary

and development risk and cost-

effectiveness assessment, and c- note

on bottleneck to budget execution.

A plan for implementing the recom-

Ministry of Finance

and President's Of-

fice

29

mendation has also been prepared

and incorporated in the PFMR II.

14

Review multi-donor

funds to increase

programming flexi-

bility and alignment

to national priorities

21

Review of multi-donor

funds to increase pro-

gramming flexibility and

alignment to national

priorities completed and

implementation of rec-

ommendations started.

In order to increase programming

flexibility and alignment to national

priorities, the financial strategy for

ARTF and nationalization of LOTFA

are being reviewed. For the time be-

ing, financial strategy for the ARTF

has been agreed subject to revision by

the end of 2015. The reviews will

continue to make multi-donor fund-

ing more flexible and align to nation-

al priorities.

Ministry of Finance

15

Working group to

improve the quality

of information shar-

ing, registration and

management.

22

Working group constitut-

ed and recommendations

made to ensure timely,

accurate and complete

aid information, with a

focus on DAD.

The guidance note on aid information

was finalized and shared with all the

donors along with reporting tem-

plates. Data will be received by Sep-

tember 7th and updated to the DAD

accordingly.

Ministry of Finance

4

Ref

orm

ing

dev

elopm

ent

pla

nnin

g

and m

anag

emen

t

16

Reprioritization of

NPPs to reduce their

numbers to 10-12.

23

Prioritization of NPPs

completed.

The National Priority Programs have

been prioritized and their numbers

have been reduced from 22 to 12.

The prioritized NPP are :

1. National Infrastructure and

Connectivity Development Pro-

gram (Big ticket projects, energy,

road, fiber optic, airports, rail-

way, transport and water)

2. Citizen’s Charter Program

3. National Economic Empow-

Ministry of Fi-

nance, President’s

Office and other

relevant ministries

30

erment Program

4. Rural Development Program

5. Justice Sector Reform Pro-

gram

6. Effective Governance Pro-

gram

7. Private Sector Development

Program (Banking reform, SMEs,

investment climate, trade and in-

formal sector).

8. Human Capital Development

Program

9. Urban Development Program

10. Public Financial Management

and Revenue Enhancement Pro-

gram (Tax and non-tax revenue)

11. Comprehensive Agriculture

Development Program

12. National Mineral Sector Pro-

gram

The list of NPPs will be submitted to

the Cabinet for approval.

17

Reinvigoration of

clusters/commissions

mechanisms for bet-

ter coordination and

implementation of

National Priority

Programs (NPPs).

24

Clusters/commissions

system launched for co-

ordination and imple-

mentation of NPPs.

A development coordination mecha-

nism within the government through

6 development council has been for-

mulated and will soon be submitted

to the Cabinet for approval. The pro-

posed councils are:

1. Human Capital Development

and Employment Council

Ministry of Fi-

nance, President’s

Office and other

relevant ministries

31

2. Construction and Infrastruc-

ture Development Council

3. Land and Water t Council

4. Finance and Economic Man-

agement Council

5. Connectivity and Regional

Economic Cooperation Develop-

ment Council

6. Governance and Justice

Council

5

Bols

teri

ng

pri

vat

e se

cto

r co

nfi

den

ce,

pro

mot-

ing

gro

wth

and

cre

atin

g j

obs

18

Implement the re-

maining items on

Afghanistan Finan-

cial Action Task

Force (FATF)

25

Approval of preventative

measure regulation by

Supreme Council of

DAB

The Supreme Council of DAB and

the Cabinet have already approved

the preventative measure regulation.

Central Bank of

Afghanistan (DAB)

26

Custom department to

effectively implement

cash courier regulation

on airports as pilot pro-

ject for declaration sys-

tem in the country.

The Customs Department in coordi-

nation with the Central Bank has pre-

pared the regulation for effective cash

courier regulation. The regulation

has already been issued through the

official gazette. A pilot project will

soon be taken up to implement the

regulation in four airports (Kandahar,

Mazar-e-Sharif, Herat and Hamid

Karzai International Airport in Ka-

bul).

Ministry of Finance

32

19

Improving invest-

ment climate by:

a. Improving ranking

of Doing Business

Indicators

b. Clarifying role of

Afghanistan Invest-

ment Support Agen-

cy (AISA) and Min-

istry of Commerce

and Industries (Mo-

CI)

27

Improving Afghanistan’s

ranking in DBI by re-

forming licensing and

registration processes,

including establishing

one-stop shop for private

businesses.

A secretariat for DBI has been estab-

lished at Ministry of Commerce and

Industries to better coordinate rele-

vant activities.

Licensing reform has been started

and signification progress has been

made. The first phase of licensing

streamlining in Kabul has been com-

pleted. Major achievements of this

phase so far have been developing a

regulatory framework for licensing,

merging the business registration and

licensing departments. As a result of

these reforms, the number of steps for

obtaining a license and the timing to

receive a license has been considera-

bly reduced.

The second phase has started in prov-

inces and by the completion of this

phase the licensing reform will be

completed.

The Ministry of Commerce and In-

dustries is in the process of construct-

ing a building where all relevant de-

partments will be shifted to move

forward towards one stop shop clear-

ances.

Ministry of Com-

merce and Indus-

tries and AISA

33

28

Roles of AISA and MoCI

clarified for investment

promotion.

Ministry of Commerce and Industries

and AISA, in close consultation with

the private sector, are working on the

investment law. The law will clarify

the roles of AISA and MOCI for in-

vestment promotion.

Ministry of Com-

merce and Indus-

tries and AISA

20

Infrastructure Devel-

opment Plan pre-

pared and implemen-

tation started

29

Infrastructure Develop-

ment Plan prepared and

approved by Cabinet for

implementation.

The first draft of infrastructure plan

titled “Regional and National Infra-

structure

Development Strategic Plan

2015-2020” has been prepared and is

under discussion within the govern-

ment and other stakeholders.

President's Office,

Ministry of Urban

Development, Min-

istry of Public

Works, Ministry of

Mines and Petrole-

um, Ministry of Fi-

nance and other rel-

evant ministries.

6

Ensu

ring

cit

izen

’s d

evel

opm

ent

rights

21

Empowering women

through:

a. Implementation of

Elimination of Vio-

lence Against Wom-

en law

b. Prepare a National

Economic Empow-

erment Plan for

women.

c. National Action

Plan for Women

Peace and Security

30

A standardized format to

collect information on

EVAW law cases across

various EVAW law insti-

tutions and an implemen-

tation plan for an online

database prepared.

A standardized format to collect in-

formation on EVAW law cases

across various EVAW law institu-

tions has been prepared and approved

by the High Council of the Elimina-

tion of Violence Against Women.

Ministry of Women

Affairs, Ministry of

Interior, Attorney

General Office and

Supreme Court

31

Concept Note for Na-

tional Economic Em-

powerment Plan for

women prepared and ap-

proved by Cabinet.

The first draft of Concept Note for

National Economic Empowerment

Plan for women has been prepared

and is in discussion within the gov-

ernment and other stakeholders.

Ministry of Labor,

Ministry of Women

and other relevant

ministries

34

finalized and imple-

mentation begun

d. Safe working/anti-

harassment guide-

lines.

32

Finalized National Ac-

tion Plan for Women

Peace and Security ap-

proved by President.

National Action Plan for Women

Peace and Security has been ap-

proved by President of Islamic Re-

public of Afghanistan and launched

on 30th June, 2015.

Ministry of Foreign

Affairs and other

relevant agencies

33

Anti-harassment regula-

tion prepared and issued

by presidential decree for

the government.

The first draft of Anti-harassment

regulation has been prepared and

consulted within the government. The

regulation will soon be submitted to

Ministry of Justice for further neces-

sary action.

Ministry of Wom-

en, Ministry of Jus-

tice, Independent

Administrative Re-

form and Civil Ser-

vice Commission,

Legislative Com-

mittee of the Cabi-

net and President's

Office

7

Res

tori

ng

fis

cal

sust

ainab

ilit

y

22

Developing natural

resources through

public-private part-

nerships that bring in

rents, taxes and prof-

its. 34

Regulations under pro-

curement law for public-

private partnerships final-

ized by Ministry of Jus-

tice, facilitating further

investments including in

natural resources devel-

opment.

The first draft of Regulations under

Procurement Law for public-private

partnerships has been prepared and

consulted within the government.

Comments are being incorporated

and the final regulation will soon be

submitted to the Ministry of Finance

for further necessary actions.

Ministry of Finance

35

8

Dev

elopm

ent

par

tner

-

ship

wit

h C

ivil

Soci

ety

23

Government plan for

enhancing coopera-

tion with civil socie-

ty prepared and im-

plementation started 35

Government action plan

for enhancing coopera-

tion with civil society

prepared and implemen-

tation started.

The draft Memorandum of Under-

standing ( MOU) between the gov-

ernment and civil society has been

finalized in consultation with civil

society. The MOU is submitted to

the President of Islamic Republic of

Afghanistan for approval.

President's Office

and Civil Society

9

Mis

cell

aneo

us

24

IMF staff monitored

program in place 36

IMF staff monitored pro-

gram finalized and im-

plementation started

The IMF staff monitored program

was approved by the IMF board and

its implementation has started.

Ministry of Finance

and other Agencies

25

Refreshed TMAF

37

Refreshed TMAF pre-

pared in consultation

with international com-

munity.

The refreshed TMAF now called

Self-Reliance through Mutual Ac-

countability Framework (SMAF), has

been prepared along with an annex

containing short-term priorities.

Ministry of Finance

and other stake-

holders

36

# Area Name HD Hard-deliverable Name Responsible Agency Status

1

Representa-

tional De-

mocracy and

Equitable

Elections

1 Develop, by early 2013, a compre-

hensive election timeline through

2015 for electoral preparations and

polling dates.

Independent Election

Commission (IEC)

This HD required announcement of election

timelines for the Presidential elections in 2014

and parliamentary elections in 2015. The pres-

idential election timeline was announced in

time and elections were held in 2014. The new

government took power in September 2014.

The announcement of timeline for parliamen-

tary elections has been delayed due to need for

further election reforms. An Electoral Reforms

Commission has already been established by

the new government and timeline for parlia-

mentary elections will be announced after rec-

ommendations are implemented.

2 The Government engages in a con-

sultative and transparent process for

all upcoming senior IEC appoint-

ments, which results in the selec-

tion of qualified and well respected

IEC senior appointees, so they have

broad support.

Independent Election

Commission

IEC commissioners were appointed on July 29,

2013 following a process of consultation after

the passing of the new Law on Structures, Du-

ties and Authorities of the IEC.

3 The Government actively supports

the implementation of a legislative

framework to be passed by the Na-

tional Assembly by June 2013. The

framework is to meet international

standards and include an impartial,

credible and independent electoral

complaint resolution mechanism.

Independent Election

Commission

Both laws namely, a) Law on the Structures,

Duties and Authorities of the IEC and b) the

Independent Election Commission Law, have

been passed by Parliament on April 14, 2013

and July 15, 2013 respectively. The President

signed and enacted the Law on Structures, Du-

ties and Authorities of the IEC on July 17,

2013 and the Independent Election Commis-

sion Law on July 20, 2013. In pursuance of

these laws an Independent Electoral Com-

plaints Commission was established before the

2014 presidential elections.

Annex II: Status of Progresson Annex I Hard-deliverables under the Tokyo Mutual Accountability Framework.

37

After the Presidential election a need for fur-

ther electoral reform was felt and agreed to by

the National Unity Government. An electoral

reform election commission has been estab-

lished for this purpose.

4 Government Ministries coordinate

and work closely with the IEC to

help ensure timely and successful

implementa-

tion of the IEC’s: i) voter registrati

on plan which complements e­tazk

era; ii) Operations Plan which inclu

des security planning, capacity

building, fraud mitigation and in-

clusive voter outreach.

Independent Election

Commission , Ministry

of Interior, Ministry of

Communication and

Technology

This HD is mainly concerned with presidential

elections which has already been held. All

concerned ministries specially the security

ministries have cooperated with the IEC for

successful conduct of presidential election. In

particular, voter registration was completed in

provinces, districts and villages. The opera-

tions plan for the election which included secu-

rity planning , capacity building, fraud mitiga-

tion and inclusive voter outreach was success-

fully implemented.

2

Governance

Rule of Law

and Human

Rights

5 1. Collect the asset declarations

forms from High Ranking Govern-

ment officials (per Article 154 of

the Constitution), and publish them

on the High Office of Oversight

(HOO) website to be available for

the public and mass media. De-

clared assets will continue to be

verified based on Afghan Law and

HOO capacity.

High Office of Oversight This HD required declaration of assets by sen-

ior officials under Article 154 of the Constitu-

tion in 2013. However, a new government

came in power in September 2014 and he con-

cerned senior officials have mostly changed.

23 out of 25 Cabinet ministers have declared

their assets. Overall, 24 out of 38 government

official of the National Unity covered under

article 154 of the constitution have declared

their assets.

6 AIHRC Commissioners are ap-

pointed in accordance with Article

11 of the AIHRC Law and Paris

principles,

Afghanistan Independent

Human Right Commis-

sion, Office for the Pres-

The Afghan Government has always been

committed to improve human rights situation

in the country and has been supporting the

38

and drawing on consultation with

cross-section of civil society organ-

izations. The appointment process

will

ena-

ble AIHRC to retain its ‘A’ accredit

ation by the International Coordinat

ion Committee of National Human

Rights Institutions.

ident.

AIHRC to retain its “A” accreditation status.

The President appointed new five Commis-

sioners and extended the tenure of office of

former 4 Commissioners on 15 June 2013. The

gender ratio is 4/9 women out of 9 Commis-

sioners. Consequently, the Sub-Committee on

Accreditation of the International Coordination

Committee for National Human Rights Institu-

tions (ICC) granted the AIHRC with “A” ac-

creditation for another five years till 2019,

which was officially announced during the 28th

ICC Meeting in March 2015.

7 MOWA, MOI and the AGO coor-

dinate to produce a detailed report

on the application of the EVAW

law in

each province. The report should

include: the number of VAW cases

brought to the police, disposition of

each case (whether prosecuted or

not) and the outcome of the prose-

cuted cases. The data collected

should

be made public and serve as a base-

line for future analyses of EVAW

law implementation.

Ministry of Women

Affairs, Ministry of

Interior and Attorney

General Office

The Government has supported the implemen-

tation of the EVAW Law and has been able to

publish two reports on implementation of the

EVAW Law with number of cases reported,

prosecutions and outcomes. The first report

covered 32 out of 34 provinces while the sec-

ond report covered all 34 provinces.

3 Integrity of

Public Fi-

nance and

Commercial

Banking

8 Based on the March 2013 MOF let-

ter in response to the Monitoring &

Evaluation Committee (MEC) en-

quiry,

action is taken to implement rele-

vant recommendations by Da Af-

Kabul Bank Receivership

Department, Da

Afghanistan Bank,

Ministry of Finance,

Attorney General,

The Government will continue to make pro-

gress on resolving the Kabul Bank issues

including asset recovery and the appeals case.

An additional $50 million have been collected

after the President's directive to reopen the

cases, taking the total of cash recoveries to

39

ghanistan Bank and other affected

institutions and all relevant initia-

tions. Government will take all pos-

sible steps to additionally recover

Kabul Bank stolen assets.

$228million.

9 Implement and remain on track

with the government program sup-

ported by the International Mone-

tary Fund

Ministry of Finance and

De Afghanistan Bank

The IMF Extended Credit Facility agreed in

2011 had one review successfully completed in

2012. Delays in the implementation of the key

reforms meant that a second review could not

be completed in 2013. While all the key reform

areas under the program were delivered upon,

some with considerable delays, the new gov-

ernment and the IMF agreed upon the Staff

Monitored Program to replace the SMP.

10 Implement Public Financial Man-

agement Action Plan and improve

the management of public funds as

measured by Public Expenditure

and Financial Accountability (PE-

FA) assessment by 20 percent by

June

2013.

Ministry of Finance Afghanistan’s performance with regard to PE-

FA assessments, when compared to the results

of Fragile States (FS) and Low Income Coun-

tries (LIC) is strongly positive. In most of the

PEFA dimensions, Afghanistan has scored

higher than FS and LICs, and even surpassing

Middle Income Countries in 2 dimensions.

The Government will continue to integrate the

recommendations of PEFA report of 2013 in

the PFMR II and make improvements in PE-

FA.

11 Raise the transparency of public

funds measured by the Open Budg-

et Index (OBI) to more than 40

percent by June 2013.

Ministry of Finance Afghanistan’s OBI score rose by 38 points to

59 in 2012 (from a score of 21 in 2010 and 8 in

2008). The score of 59 significantly surpasses

the target of 40% agreed under TMAF – an

40

indicator of government’s transparency in

budgeting. The next OBI report is expected to

be released this year (2015). Further improve-

ments are expected in the OBI score of Af-

ghanistan.

12 Implement the recommendations

from the Financial Action Task

Force Asia Pacific Group regarding

anti-money laundering and combat-

ing terrorist financing as per the

timeline recommended by IMF.

Ministry of Finance and

De Afghanistan Bank

New Anti-money Laundering (AML) and

Countering the Financing of Terrorism (CFT)

laws were enacted in late June and early July

2014, respectively.

4

Government

Revenues,

Budget

Execution

and Sub-

National

Governance

13 Develop a provincial budgeting

process for FY 1393 that includes

provincial input into the relevant

ministries'

formulation of budget requests,

linked to a provincial planning pro-

cess in which Provincial Councils

have their consultative roles.

Ministry of Finance,

Ministry of Economy

and Independent

Directorate for Local

Governance

The Ministry of Finance revised Provincial

Budgeting Policy in accordance with commit-

ments of National Unity Government and pre-

sented it to the cabinet and requested Line

Ministries to provide their final comments

within 15 days to MOF. The Cabinet approved

the Policy in principle, and assigned MoF,

MoEc and IDLG to review and submit it to

minister’s council for approval, the joint re-

view process is accomplished and the revised

version has been sent to minister's council for

approval.

5

Inclusive and

Sustained

Growth and

Development

14 Pre-

pare an analysis of 1392 budget tha

t shows adequate resource allocatio

ns to achieve Afghanistan’s Millen

nium Development Goals (MDG)

targets for health, gender, educa-

tion, environment and food securi-

Ministry of Finance The analysis for 1392 budget was completed.

41

ty.

15 Prepare a plan by June 2013 that

shows Afghanistan will achieve

accession to World Trade Organi-

zation

(WTO) by the end of 2014.

Ministry of Commerce

and Industry

Afghanistan started its accession process to

WTO in 2004. The last four years have wit-

nessed major progress on all aspects of the

WTO accession process. An action plan was

prepared by June 2014 and successfully im-

plemented. To have a smooth and successful

accession, with the new government in place

and according to the 100 days plan of Ministry

of Commerce and Industries, all previously

completed processes of accession have been

reviewed and a final accession package is

ready to be reviewed by the President of the

Islamic Republic of Afghanistan.

16 Establish Road and Civil Aviation

Institutions by June 2013.

Ministry of Public

Works and Ministry of

Transportation and Civil

Aviation

The establishment of the Road Authority (RA),

Road Fund( RF) and Transportation Insti-

tute(TI) have been authorized by the Presi-

dent and the cabinet . Technical assistance is

being provided to design and assist with the

implementation of the Afghanistan’s road net-

work.

17 Encourage investment in the extrac-

tive industry by approving a mining

law that meets international stand-

ards.

Ministry of Mines The new Minerals Law was passed by the Par-

liament on 16 August 2014. To further im-

prove the institutional and business environ-

ment for investors, the new Minerals Law is

currently under review in consultative process

with the civil society, private sector and other

stakeholders.

42

# Area Name HD Hard-deliverable Name Responsible Status

1

International

Commitment

to

Improving

Aid

Effectiveness

1

By June 2013, each Development

Partner officially confirms its Tokyo

commitments or projections from

2012 to end 2015.

International Community

All donors provided confirmation of

their Tokyo commitments or projec-

tions from 2012 to the end of2015

prior to the July 2013 SOM. For

some donors, this commitment is

subject to the approval andappropria-

tion of funds from their respective

legislative branches of government.

2

Each Development Partner updates

its aid information in the Donor As-

sistance Database (DAD) by June

2013 and annually

thereafter.

International Community

Except 7 DPs, all DPs provided full

or partial information for the DAD.

In total the data provided bydonors

for the DAD represents around 98%

of aid disbursed during 2012-14. The

Government alsoprovided ODA re-

porting guidance and data collection

templates including the appropriate

timeframe for data provision based

on the Budget Calendar.

Status of progress on Annex II Hard-deliverables under the Tokyo Mutual Accountability Framework.

43

3

By December 2013, each Develop-

ment Partner finalizes its Develop-

ment Framework Agreement (DFA)

or equivalent (the format to be

agreed by MoF) to reconcile donor

assistance with government devel-

opment priorities, make aid more

predictable and to confirm mutual

accountability.

International Community

12 DPs out of 32 have DFAs in place

of which eight were concluded prior

to the TokyoConference (July 2012)

and four between the Tokyo Confer-

ence and SOM (July 2013). Three

DPs are currently engaged in discus-

sions with the Government.

4

By June 2013, and annually thereaf-

ter, each Development Partner

routes, 50% of its aid through the

National Budget

International Community

Donors and the Government have

agreed on a definition for on-budget

and associated guidelinessubject to

DPs providing information on hu-

manitarian assistance, as outlined in

the on-budget

guidelines.

Of all the bilateral and multilateral

donor partners and funds, 12 man-

aged to achieve or exceed the target

of channeling 50% of ODA through

the on-budget system by volume of

commitment and only 9 achieved or

exceeded the same target by volume

of disbursement.

Combined, those donors who meet

the 50% on-budget target by volume

of disbursement contributed USD 1.9

billion or 31% of the total on-budget

assistance during 2012-14.

5 By June 2013, and annually thereaf-

ter, each Development Partner International Community Many donors have made progress in

aligning their development aid with

44

aligns 80% of its aid to the National

Priority Programs at least.

the NPPs. However,differences in

the interpretation of the term align-

ment mean that it is not possible to

confirm the precise degree of align-

ment with NPPs. Further work will

be jointly undertaken by theGovern-

ment and development partners to

verify alignment data, based on an

agreed definition.

The Government is keen that donors

move further towards use of country

systems andinstitutions.

6

By June 2013, Joint Review of cur-

rent and plannedprojects/programs

conducted with each Development

Partner to determine and agree on

the level of alignment with NPPs.

International Community

There has been no progress on agree-

ing to a common definition of align-

ment and as a result joint review of

current and planned projects have not

been conducted.

7

With effect from February 2013,

Financing Agreements, or

equivalent, (the format, scope and

applicability will to be agreed by

Development Partners, on a bilateral

basis, with the MoF,) for new on

and off -budget projects signed with

Development Partners.

International Community

According to the MoF analysis, of

the total ODA disbursed through off-

budget ($7 billion) during FY 2012-

14 havesigned Financing Agree-

ments with MoF for projects with a

total value of $2.9 billion. Thisrepre-

sents 41% of off-budget aid for

which Financing Agreements have

been signed with theGovernment.

45

8

Joint Assessments, which meets do-

nors and governmentstandards, of

fiduciary risks at major ministries

for increased onbudget financing

conducted by December 2013.

International Community

Development Partners commit to

conduct joint assessments by De-

cember 2013.

Following the release of the Guid-

ance Note on Joint Assessments, the

Government requested, onJune 13,

2013, that DPs provide information

on their on-going and planned as-

sessments including

joint assessments. Information pro-

vided by DPs for FY 2013-14 indi-

cate that only 12.5% of assessments

conducted were joint.

2

International

Commitment

to

Improving

Aid

Effectiveness

9

Donors increase the share of their

assistance provided via the Afghani-

stan Reconstruction Trust Fund

(ARTF) incentive program, or other

mechanisms as requested or agreed

by the Afghan Government, to 10

percent by 2014, with a goal of 20

percent of funding through incentive

mechanisms by the end of the

Transformation

Decade. Incentive programs should

seek to provide the Afghan Gov-

ernment with more flexible, on-

budget funding in conjunction with

progress on specific economic de-

velopment achievements.

International Community

46

3

International

Commitment

to

Improving

Aid

Effectiveness

10

The AMP implementation plan in-

cluding mechanism for joint review

agreed by government and donors

by June 2013. International Community

The Government has prepared and

shared the AMP implementation

plan, including its monitoring

framework, with all DPs. DPs and

Government will seek to prioritize

key elements of the AMP implemen-

tation plan and ensure that process is

complimentary and coordinated with

TMAF discussions.

11

By July 2013 each Development

Partner prepares a plan, with the

Ministry of Finance, to align 80% of

its total aid to deliverables of NPPs.

International Community

As a definition on alignment has not

yet been agreed, donors are currently

not developing plans to align a high-

er level of aid to the NPPs, although

most donors consider that the 80%

target has already been met. The

alignment data is yet to be assessed

by both sides.

8

Jointly identify funding modalities

for National Priority Programs by

September 2013.

International Community

The NPPs are being reprioritized and

accordingly the government will

identify funding modalities for the

new programs.

47

Annex III: National Procurement Commission Reviews (as of August 17, 2015)

The National Procurement Commission is established and has been regularly reviewing the contracts and

made extremely good progress till date. The commission since its establishment has consecutively con-

vened 18 weekly sessions.

Number Description Information

1 # of projects that NPA has received >300 projects

2 # of projects that NPA has assessed >300 projects

3 # of projects presented to NPC 294 projects

4 # of projects approved by NPC 219 Projects, worth AFN 43.7 billion

5 # of projects that NPC has returned

for correction

41 Projects

6 # of projects rejected by NPC 28 Projects

7 Total value of evaluated projects

(AFN)

AFN 58.4 billion

8 Amount saved (AFN) AFN 8.3 billion

9 Average time it takes NPC to evalu-

ate a project

One week

10 Usual time it takes NPC to process a

project

45 days for the entire A-Z procurement process in nor-

mal circumstances. It starts from Identification of re-

quirement by PE until the contract award is approved

by NPC.

11 Reasons for sending projects back to

procurement organizations

A. Failing to present sufficient documentation for pro-

ject evaluation

B. Failing to provide convincing explanations to the

membership of National Procurement Commission

C. Improper processing of projects on the part of the

Procurement Organization

D. Lack of a proper working plan

E. Lack of a transition plan from non-governmental to

government organization

12 Reasons that projects are not ap-

proved

Processing of projects without due consideration of the

articles and procedure of the Public Procurement Law

of Afghanistan.

48

Policy Department,

Ministry of Finance,

Kabul, Afghanistan